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Retained earning = Capital profit , why Retained earnings appears in SFP?
 
befriends
Posted: 19-04-2009 11:50 AM   [ Ignore ]
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qs above

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Steve Collings
Posted: 19-04-2009 11:51 AM   [ Ignore ]   [ # 1 ]
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Befriends,

Are you using your study text books at all?

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befriends
Posted: 27-04-2009 06:54 AM   [ Ignore ]   [ # 2 ]
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Steve ‘do.

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Bluewednesday
Posted: 27-04-2009 09:22 AM   [ Ignore ]   [ # 3 ]
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I’m not sure what you mean by your reply to steve but think of your accounting equation assets - liablities = capital.  That’s what your statement of financial position is.  Therefore you have to have all parts to balance out

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befriends
Posted: 06-05-2009 09:29 AM   [ Ignore ]   [ # 4 ]
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befriends - April 19 2009 11:50 AM

qs above

Retained earnings appear in SFP - Statement of financial position because Profit comes in SFP.

A= L+C(-D+P)

As in this equation of - Accounting Equation - Capital has elements of Drawings and Profit. And drawings are being subtracted and profits being added.


Or look at the Profit euqation.

Profit = Net Assets - Ci (capital introduced) +Drawings

So, Retained Earnings / Retained Profits should appear in SFP because it’s Profit.

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befriends
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befriends
Posted: 06-05-2009 09:30 AM   [ Ignore ]   [ # 5 ]
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or at least that the logic I’ve right now. Can some improve upon it. Can recall around 20-25 questions that came in paper.

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befriends
Posted: 06-05-2009 09:30 AM   [ Ignore ]   [ # 6 ]
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Friends are also doing so.

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